Finding Text
Finding 2025-004: Coronavirus State and Local Fiscal Recovery Funds Reporting Procedures
Type of Finding: Control
U.S. Department of Treasury
Pass-through Entities: The Right Place, Inc. and Michigan Department of Treasury
Assistance Listing Number: 21.027
Award Numbers: COVID-19 Revitalization and Placemaking Grant, COVID-19 American Rescue Plan Act
Award Year End: June 30, 2026 and December 31, 2026
Specific Requirement: (L.) Reporting
Criteria: Section 200.303 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-federal entity to establish and maintain effective internal control over the federal award that provides a reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the specified guidance that requires proper segregation of duties by dividing key responsibilities among different people to reduce the risk of error or fraud. This should include separating the responsibilities for authorizing transactions, processing and recording them, reviewing the transactions, and handling any related assets. No one individual should control all key aspects of a transaction or event. In addition, this guidance also requires transactions and internal controls to be clearly documented, and the records should be properly maintained and readily available for examination.
Questioned Costs: None.
Condition: During our detailed testing of the area of reporting, we noted that certain reports were missing review and approval by an appropriate individual with adequate skills, knowledge, and experience.
Context: For the Revitalization and Peacemaking (RAP) grant, the two quarterly reports and the annual performance report selected for testing were reviewed with documented approval. However, the American Rescue Plan Act (ARPA) annual performance report was missing documented review and approval. The sample was not a statistically valid sample, and the matter appears to be a systemic condition.
Effect: Failure to properly review reports before they are submitted could result in inaccurate information being transmitted, resulting in a compliance finding.
Cause: The Village was unaware of the requirement to have a documented review and approval over the area of reporting for ARPA grant awards in addition to the documented review and approval of the RAP grant awards.
Repeat Finding: This is not a repeat finding.
Recommendation: The Village should follow established procedures to require the documented review and approval of both RAP and ARPA grant reports by an individual with adequate skills, knowledge, and experience prior to submission.
Views of Responsible Officials: The Village agrees with this finding.